The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has revealed that the Nigerian government, under the leadership of President Bola Tinubu, is working towards achieving a fair exchange rate between the US dollar and the Nigerian naira before the end of 2023.
According to Oyedele, the government hopes to see a “fair price” for the dollar at “N650 to N750” by the end of this year. Speaking with Bloomberg on Monday, he explained that the government plans to introduce new foreign exchange rules, including a crackdown on illicit currency trading. These new rules and reforms are expected to result in the naira closing the gap with the unofficial rate and reaching a fair price.
Oyedele added that the government’s planned measures include clearing a backlog of dollar demand estimated at about $6.7 billion, bolstering the naira forward market, and setting transparent rules for the operations of the official market. In his view, the new measures would give a new lease of life to all legitimate foreign exchange transactions while stifling the illicit “black market” for foreign currency.
“We think all of that will happen before December, and maybe in a matter of a couple of weeks, we will begin to see the results, such that before the end of the calendar year, the naira should find its true value, not the one that is currently being offered in the parallel market,” Oyedele said. He further added that the government sees a “fair price” for the dollar at “N650 to N750”.
Oyedele also noted that the current difference between the official and parallel market rates “means you are sucking liquidity and supply from the official market to the parallel market, because everyone wants the premium”. As per market reports on Monday, one dollar currently exchanges for N1,150 at the parallel market.